- Markets tend to return to the mean over time
- Excess in one direction will lead to an opposite excess in the other direction
- There are no new eras – excesses are never permanent
- Exponential rapidly rising or falling markets usually go further than you think, but they don’t correct by going sideways
- The public buys most at the top and the least at the bottom
- Fear and greed are stronger than long term resolve
- Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names
- Bear markets have three stages – sharp down, reflexive rebound and a drawn out fundamental downtrend
- When all the experts and forecasts agree – something else is going to happen
- Bull markets are more fun than bear markets
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